Moving Insurance – It Pays to Be Protected

Make sure you are well covered when you move

By Rick Hazeltine

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There's nothing quite like seeing all your worldly possessions stuffed into a truck and you waving
goodbye as it pulls onto the road headed to your new home. Naturally, a small part of you
wonders if you'll ever see your "life" again and, if so, what shape it'll be in.

In the same way that you get health insurance coverage to safeguard your personal health, this is where moving insurance can help you sleep at night until everything is safely delivered and in its proper place. Accidents happen even to the most careful of people or moving companies.

Following is a primer on protecting your belongings during a move.

Basic coverage

All moving companies are required by federal regulations to offer two types of coverage to
consumers on out-of-state moves.

The first coverage is called "released value protection" and is set at 60 cents per pound.
This means that you will be reimbursed for everything from your paperclips to family
heirlooms at 60 cents per pound. This coverage is included in the quote given by the
moving company. Of course, you may ask yourself, "If my things are only worth 60 cents a
pound why am I paying someone a lot more to move them?"

All of your material belongings are certainly worth more than 60 cents a pound. For that
reason, long-distance movers also offer what's called "full-value protection" The coverage is
based on your valuation of the contents being transported. The cost is based on about 1
percent of the valuation, so if you decide all of your belongings being shipped are worth
$50,000, you would pay about $500 for full-value protection.

Full-value protection allows the moving company two options if any articles are lost,
destroyed or damaged during the move. This is also called "full replacement value." The
moving company, not the consumer, decides how amends will be made for the property.

The moving company can either have the item repaired so it is in the same condition as it
was before being damaged or they can replace the item with another of like-kind. Basically,
if your two-year-old washing machine is smashed, the moving company will not replace it
with a new one. You will likely be given the fair-market value of a two-year-old washing machine.

Another caveat – movers are not required to reimburse you for any item that is valued at
more than $100 per pound unless it is specifically listed on the shipping documents. This is
set by the Surface Transportation Board, the federal organization that oversees moving
companies. For example, a bracelet that weighs four ounces and worth more than $25
($100 per pound) must be listed on the shipping documents or it will not be covered if it is
lost, damaged or destroyed during the move.

If you opt for this coverage, you will have to inventory your belongings and list everything
that is valued at more than $100 per pound and make sure it is listed on the shipping
documents so that you are covered. This can be an overwhelming task once you start
looking through your belongings.

Expanded mover coverage

Depending on your risk tolerance, you may decide to upgrade your coverage. There are
several options available to consumers.

You can ask the moving companies from which you are getting bids if they offer other
valuation options. If your moving company is covering your belongings, it is not insurance.
Moving companies are not allowed to sell insurance. Instead, you are paying for stated
liability, in other words, you are setting the limits for your moving company's liability if your
belongings are damaged, lost or destroyed.

Some moving companies offer expanded valuations. Declared value allows you to set a per-pound amount for your belongings. For example, if you decide your belongings are worth $6 per pound and your total shipment is 10,000 pounds, you are placing a valuation of $60,000 on the total shipment. That would be the maximum you would receive if the entire shipment was destroyed or lost. Individual items would be replaced with like-kind, a two-year-old washing machine for a two-year-old washing machine. This is important to consider because items such as used clothing have little actual cash value.

You can also ask if the moving company offers lump sum value, also called assessed value.
The coverage is basically the same except the consumer sets the amount by value instead
of weight. This is better if you have a lot of small, high-value items that don't weigh much.

What's not covered

As important as what is covered, is what is not covered.

With valuation coverage, movers are not responsible for items in boxes they did not pack.
Unless the box shows significant damage, you are not likely to be covered for damage to
anything inside the box. You are also not covered for "natural disasters," such as fire,
hurricane, tornado, windstorm, hail, etc. Also, if items are damaged while in storage that is
not controlled by the moving company, you are not covered.

Other options

You more than likely have some insurance coverage through your homeowner's policy. The
extent of that coverage, however, is not likely to be worth much. Most homeowner policies
cover your belongings when they are in the house, not on the road in a semi truck.

Check with your insurance agent or company. Typically, policies cover only 10 percent of
the belongings that are temporarily not at your home. You can also ask if the company
offers specific moving insurance as well as what your current policy actually covers.

There are also insurance companies that offer what's called "relocation insurance." These
policies are similar to lump sum and declared value coverage that the moving company
may offer. Some people prefer to have the belongings insured by a third party or the
moving company they are using does not offer this type of valuation coverage.

You can also get total loss coverage, which will replace all of your belongings in case of a
catastrophe, such as fire, theft, truck accident, etc. Individual items are not covered and
this coverage is only in case of the total loss of your belongings.